Wharf REIC halves loss by 93%, hikes interim dividend 42% to 94 cents
AM730 · 1 SOURCESabout 1 hour ago2 MIN
Summary
Wharf Real Estate Investment Company Limited (Wharf REIC, 1997.HK) announced its interim results for the six months ended June 30, showing a significant improvement in financial performance. The company posted a first-half loss of HK$176 million, representing a 92.7% narrowing from the same period last year . Excluding the impact of investment property revaluation losses, underlying net profit grew 6% to HK$3.311 billion . The board declared a first interim dividend of HK$0.94 per share, an increase of more than 42% year-on-year, and raised the dividend payout ratio from 65% to 90% effective this year .
Key Points
- Wharf REIC's first-half revenue edged down approximately 1% year-on-year to HK$6.34 billion, with investment property income falling 2% to HK$5.265 billion .
- Hotel revenue rose 10% to HK$842 million, while development property income dropped 12% to HK$51 million during the period .
- The company's net debt decreased by about 8.8% from year-end 2023 to HK$29.2 billion as of June 30, with the gearing ratio declining to 15.9% .
- Wharf REIC disclosed that Wheelock Properties' Singapore office tower has been agreed for sale at a 12% premium to book value, which will reduce the gearing ratio to approximately 11% upon completion .
- Harbour City, the group's flagship property, recorded flat operating profit with overall revenue up 1%; Times Square saw overall revenue and operating profit decline by 12% and 13% respectively .
Why It Matters
The aggressive dividend increase signals Wharf REIC's confidence in stabilizing cash flows from its core Hong Kong commercial portfolio despite a challenging retail environment. The planned reduction in net debt to approximately HK$20 billion by year-end, coupled with the Singapore asset sale, strengthens the company's balance sheet flexibility and may set a precedent for other Hong Kong property developers facing similar refinancing pressures .
The aggressive dividend increase signals Wharf REIC's confidence in stabilizing cash flows from its core Hong Kong commercial portfolio despite a challenging retail environment. The planned reduction in net debt to approximately HK$20 billion by year-end, coupled with the Singapore asset sale, strengthens the company's balance sheet flexibility and may set a precedent for other Hong Kong property developers facing similar refinancing pressures .